US Dollar (USD)
The Dollar weakened against most majors and declined to its weakest level against the Euro this year as record low U.S. borrowing costs encouraged investors to sell the currency and buy higher yielding assets. The U.S. trade deficit widened in July and imports gained by a record 4.7 percent, signaling a revival of commerce as the global recession eased. Initial Jobless Claims came out better at 550K vs. 555K forecast. NASDAQ and Dow Jones rose by 1.15% and 0.84% accordingly. Crude oil advanced by 0.9% closing at 71.94$ a barrel and Gold (XAU) closed almost unchanged at 997$ an ounce. Today, Import Price Index is expected at 1.0% vs. -0.70% prior. Michigan Consumer Sentiment Index is expected higher at 67.10 vs. 65.7 prior and the Federal Budget Balance is expected at -156B vs. -180.70B prior. Treasury Secretary Geithner will speak today about the monetary policy and the economic conditions.
The Euro continued to rise against the Dollar reaching its highest level since December trading with a low of 1.4502 and with a high of 1.4613. The European Central Bank policy makers signaled they intend to leave emergency lending measures in place into next year to support an economic recovery. No important data expected today.
British Pound (GBP)
The Pound strengthened versus the Dollar after Bank of England released its decision to keep buying as much as 175 billion pounds ($290 billion) of assets to help economy exit the recession. BOE left the interest rate at its current level or 0.5%. GBP/USD traded with a low of 1.6480 and with a high of 1.6685. Today, PPI Input is expected at 0.60% vs. -1.4% previously.
Japanese Yen (JPY)
The Yen continued to rise against the Dollar trading with a low of 91.42 and with a high of 92.26. Japanese machinery orders fell to a record low in July, signaling companies burdened with idle factories are wary that a rebound in global demand will last. GDP came out worse at 0.6% versus 0.9% forecast. No economic data expected today.